FM announces FDI hike in defence production; bans imports of some weapons
To boost Make in India in defence production, Finance Minister Nirmala Sitharaman on Saturday (May 16) said the FDI limit in defence manufacturing will be hiked to 74 per cent from 49 per cent while some weapons and platforms will be banned for imports.
To boost Make in India in defence production, Finance Minister Nirmala Sitharaman on Saturday (May 16) said the FDI limit in defence manufacturing will be hiked to 74 per cent from 49 per cent while some weapons and platforms will be banned for imports.
“Items banned for imports can only be purchased from within the country,” she said presenting the fourth tranche of the economic stimulus package and also added that the list would be expanded every year in consultation with the armed forces.
Also, there will be indigenisation of some imported spares, she said adding separate budget provisioning for domestic capital procurement will be done.
This, she said, will reduce the huge defence import bill.
“Ordnance Factory Boards will be corporatised for better management and eventually get listed on the stock market,” she said adding corporatisation is not privatisation.
In the fourth tranche of ₹20 lakh crore stimulus package, she also stated that time-bound defence procurement process and faster decision making will be ushered in by setting up of a Project Management Unit (PMU) to support contract management, a realistic setting of General Staff Qualitative Requirements (GSQRs) of weapons/platforms and overhauling trail and testing procedures.
“The FDI limit in the defence manufacturing under automatic route will be raised from 49 per cent to 74 per cent,” she said.
Related news: Nirmala Sitharaman announces 4th tranche of Centre’s stimulus package
According to the Stockholm International Peace Research Institute (SIPRI), the US, China and India were the world’s three biggest military spenders in 2019, followed by Russia and Saudi Arabia.
The two Asian countries made it to the top three for the first time, SIPRI said in a report last month, reported LiveMint.
Prime minister Modi had in February set a target of $5 billion in defence exports in next five years for India at the inauguration of the 11th Defence Expo in Lucknow.
(With inputs from agencies.)